Carrier Global to acquire Viessmann Climate Solutions for EUR 12B in cash, stock

Carrier will acquire Viessmann Climate Solutions, the largest segment of Viessmann Group, in a cash and stock transaction valued at EUR 12B, subject to working capital and other adjustments. The value represents approximately 13X synergized projected 2023 EBITDA. A privately held company with a 106-year legacy of innovation, Viessmann Climate Solutions provides Carrier with an iconic, premium brand in the highest growth segment of the global heat pump and energy transition markets. In addition, Carrier announced plans to exit its Fire & Security and Commercial Refrigeration cabinet businesses. Carrier expects to exit its Fire & Security and Commercial Refrigeration businesses over the course of 2024. Carrier’s 2020 spin-off from United Technologies made it a nimbler, more focused, higher growth company. The exits of Fire & Security and Commercial Refrigeration will bring greater focus to Carrier’s strategy and portfolio, while benefitting these businesses’ customers and employees. Carrier expects to use proceeds from any separation transaction to reduce leverage consistent with an investment-grade profile and to repurchase the equivalent shares issued to the Viessmann family. The planned exits do not include UTEC, Fire & Security’s controls business for residential HVAC customers or Carrier Transicold’s transport refrigeration, Profroid mechanical systems and Sensitech monitoring businesses. Under the terms of the agreement, subject to working capital and other adjustments, Carrier will acquire Viessmann Climate Solutions for EUR 12B, of which 80% will be in cash and 20% in Carrier common stock delivered to Viessmann Family Holdings. Reflecting their confidence in Carrier’s growth and value creation, the Viessmann family has agreed to certain long-term lock-up provisions with respect to its equity ownership of Carrier common stock. Max Viessmann will join Carrier’s Board of Directors. Carrier expects to fund the cash portion of the consideration through a combination of cash on hand and newly committed financing. Carrier expects to maintain its investment grade credit rating at the close of the Viessmann Climate Solutions acquisition and return to its pre-transaction leverage profile within approximately two years. It also expects to resume share repurchases upon reaching its current leverage. The Company remains committed to a growing and sustainable dividend. The Carrier and Viessmann boards of directors have each approved the acquisition, which is expected to close around the end of 2023, subject to customary closing conditions and regulatory approvals.